Primark Owner Forecasts Uptick in Lower-Income Consumer Confidence

The head of Associated British Foods has predicted rising confidence among lower-income consumers.

As the Financial Times (FT) reported Tuesday (Nov. 5), George Weston made this forecast in light of the Labour government’s budget, while also predicting that his company would be set back by “several tens of millions” due to some of the changes.

Weston — whose company owns discount department store chain Primark and brands like Twinings tea and Ovaltine — told the FT it was “hard to look at this budget and say it was a good budget for the high street,” pointing changes to national insurance and the minimum wage, along with fewer reports to business rates than hoped.

He added there was “actually … more good news for the least affluent in the budget than bad,” which he projected would bring about an increase in consumer confidence and “a very good Christmas” for Primark, which owns 451 stores in 17 markets.

On the other side of the Atlantic, this week saw the release of the Conference Board’s latest Employment Trends Index (ETI), showing that Americans are feeling somewhat more positive about jobs — how available they are and whether they’re hard to get.

The Conference Board noted that the index, at 107.66 in October, was more or less the same as the 107.58 logged the prior month. As the board described the index, when the index increases, “employment is likely to grow as well, and vice versa.”

According to a statement from Mitchell Barnes, economist at the Conference Board, “the labor market continues to cool from its rapid post-pandemic pace, but the ETI suggests that this trend may be leveling out. This comes at a time when we expect business uncertainty to begin lifting, as the Federal Reserve’s rate cuts start taking hold and uncertainty around the U.S. election subsides.”

Meanwhile, recent PYMNTS Intelligence data shows that consumer spending patterns reflect a stable but cautious economic environment amid GDP growth.

“Consumer spending remains a crucial growth driver, yet the decline in disposable income growth and the savings rate may signal future constraints on spending capacity,” PYMNTS wrote in late October.

Additional data shows that as of September, two-third of consumers live paycheck to paycheck, a 3% increase from a year ago.

“Savings might help supplement slowing disposable income, but as savings rates dip a bit, replenishing those cash coffers takes time,” that report said. “The latest paycheck-to-paycheck-related data have detailed that consumers who struggle to pay their monthly bills find ways to hold on to the savings they have.”

In fact, struggling paycheck-to-paycheck consumers have about $2,447 in savings on average, while those living without difficulty have an average of $7,558.